QUESTION

Question 4: (a). Difference Between Buying And Procurement

SOLUTION

• Procurement (Benslimane, 2005) is defined as acquisition or purchasing of a suitable goods or services at the best possible total expense of ownership. On the other hand, buying is a form of purchasing that comprises getting the goods and services by paying some amount of money or cost.
• There are two types of procurement, known as, direct procurement and indirect procurement. The direct procurement comprises the purchasing of raw materials and production goods, whereas indirect procurement includes the acquisition of protection, restore and operating supplies.
• Buying is also divided primarily into two types, called, direct buying and indirect buying. The direct form of purchasing comprises the way of paying cash or money directly and receiving the goods or the services, while in the case of indirect buying the method includes purchasing of goods or services via the third party sources.

(b). (i) In case of Lump sum contract (Wood, 2012), contractor is the risk taker. Contractor is the person, who takes care of all the risk involved in the agreement and faces them before any other party face it. Mainly 90% of the risk in case of lump sum agreement goes to contractor as he is the initiator of the agreement and he only attracts people to enter into the contract.

(ii). In a case of Cost Plus agreement, purchaser takes all the risks. Purchase is the person who is directly involved in buying of goods and services. Buying is a form of purchasing that comprises getting the goods and services by paying some amount of money or cost. Buying is divided primarily into two types, called, direct buying and indirect buying. The direct form of purchasing comprises the way of paying cash or money directly and receiving the goods or the services, while in the case of indirect buying the method includes purchasing of goods or services via the third party sources.

(c). Approaching the mediator is the only remedy to solve the dispute in connection with engineering construction and contract documentation. Mediator is a neutral party, who supports in negotiations and disagreement resolution.

(d). Three ways to for discharging a contract for construction are:

• Default Performance (Brown, 2006):  The default performance will not give any increase to lesser obligations, as the agreement will have been closed successfully.
• Non-performance: In this case, no responsibility have continue survived whereas in the  case of a valid agreement the main compulsions finish although the agreement might continue in existence and give increase to the less obligations to pay for the damages.
• Competition: An agreement is believed to be disturbed; both parties are released from the agreement.

(e). The legal remedy for a breach of contract id the result of an agreement that is based on the categorization of the term which has been breached as either a condition, warranty or in propose.

REFERENCES:

Wood, Hannah, 2012, “Why Do Companies Hire Contractors?” The Services, pp 306

Benslimane, Y., 2005, “Investigating Search Costs and Coordination Costs in Electronic Markets: A Transaction Costs Economics Perspective”, Electronic Markets, pp. 213–224

Brown, John, 2006, “North Charleston”, BookSurge, pp 55, ISBN 1-4196-4893-4

JI26

But you can order it from our service and receive complete high-quality custom paper.  Our service offers Accounting  essay sample that was written by professional writer. If you like one, you have an opportunity to buy a similar paper. Any of the academic papers will be written from scratch, according to all customers’ specifications, expectations and highest standards.”